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Jobs data pushes dollar to two-month high

The Australian dollar rose towards a two-month high on Thursday in the wake of a surprisingly strong jobs report.

The dollar stood at $US1.0465, up around 0.1 per cent on the day, having climbed as high as $US1.0481 after data showed the economy created 13,900 jobs in November, outstripping forecasts for no jobs growth.

The unemployment rate also surprised with a drop to 5.2 per cent.

"The Reserve Bank of Australia (RBA) is likely to be encouraged by today's results as it sees the annual pace of job growth rise to 1.1 per cent," said Hans Kunnen, chief economist at St George Banking Group.

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"We stand by our call of no rate cut in February but recognise that the RBA could well cut rates again depending on how the upcoming data unfolds."

Markets trimmed the chance of further easing with interbank futures implying less than 50-50 chance of a quarter point cut in February, when the RBA holds its next policy meeting.

Earlier in the week, the RBA cut its cash rate by a quarter point to a record-matching low of 3.0 per cent.

The Aussie was within easy reach of a two-month high of $US1.0491 set last week and a break above would see a test of the Sept 21 trend high at $US1.0519.

Traders, though, cited persistent selling ahead of $US1.0500 with talk of an option barrier at $US1.0500. Stops were also seen just above that level.

Against the yen, the Aussie hit an eight-month high of 86.47 .

Australian government bonds were mixed with the three-year contract flat at 97.380, while the 10-year contract was 0.020 points higher at 96.920.